Investors were stunned Tuesday by the quarterly report from Gilead Sciences (GILD), the company whose $1,000-a-day drug has made it the toast of the biotech sector.
Investors knew that Gilead, after giving its hepatitis C drug Sovaldi such a whopping price tag, would rack up some serious sales. But the earnings report was still so surprising that after-hours trading of the stock was briefly halted Tuesday afternoon. Gilead's website showing the report was so overwhelmed that it couldn't load.
"Holy Sovaldi!" wrote one Twitter user. "That's the way to beat."
The company blew away estimates with an adjusted profit of $1.48 a share -- up from 48 cents a share a year earlier. Analysts were expecting only between 83 cents and 91 cents a share. Revenue hit a cool $5 billion, far more than the $3.98 billion expected.
Sales of Sovaldi alone hit $2.27 billion in the quarter -- topping a prediction from analysts at RBC Capital Markets of sales in the range of $1.4 billion to $2 billion.
The hepatitis C treatment can cure up to 90 percent of patients within three months, but its high price tag has been heavily criticized by lawmakers as well as by insurance companies complaining that they can't easily foot the bill for the treatments.
Analysts predicted that Sovaldi could bring in $7 billion to $10 billion in its first year alone -- estimates that now may turn out to be too low. The Food and Drug Administration approved Sovaldi in December.
Gilead got control of the drug in late 2011 when it bought Pharmasset for $11 billion in cash. Investors were furious at the high purchase price, sending Gilead shares down 9 percent in response.
In hindsight, though, that $11 billion looks like a pretty good deal. Gilead may recoup the entire Pharmasset purchase price in first-year Sovaldi sales alone, wrote Bloomberg biotech reporter Michelle Fay Cortez on Twitter. "There's some M&A perspective," she added.
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